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Industry Location and Variety Growth: Empirical Examination of Regional Exports

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  • Yushi Yoshida

    () (Faculty of Economics, Kyushu Sangyo University)

Abstract

Recognizing goods produced in different sub-regions within a country as distinct differentiated products, we offer new evidence of variety expansion in nation’s export. We decompose Japanese national exports into prefecture sub-regions and construct extensive margins and intensive margins of exports for sub-regions for the period between 1988 and 2005. In this study we examine exports of over 41 sub-regions of Japan in over 7,000 product categories. First, we examine to what extent the empirical findings of the extensive margin in Hummels and Klenow (2005) for cross-country samples applies to sub-regions within a country. We find that extensive margin accounts for over 60 percent of the greater exports of larger sub-regions. Second, we examine heterogeneous growth of exports variety among sub-regions for the sample periods. We find export variety of most prefectures expands in our sample periods, but decreasing in variety can also be found for prefectures positioned in either high variety or lowest variety group in 1988. We conclude that export expansion in terms of new exports from sub-regions within a country can account significant portion of product variety and export production is being dispersed among regions rather than going through the process of agglomeration.

Suggested Citation

  • Yushi Yoshida, 2008. "Industry Location and Variety Growth: Empirical Examination of Regional Exports," Discussion Papers 30, Kyushu Sangyo University, Faculty of Economics, revised Dec 2008.
  • Handle: RePEc:kyu:dpaper:30
    as

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    File URL: http://www.kyusan-u.ac.jp/J/yushi/MyPapers/dp30R.pdf
    File Function: Revised version, 2008Dec
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    File URL: http://www.ip.kyusan-u.ac.jp/keizai-kiyo/dp30.pdf
    File Function: First version, 2008Mar
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    References listed on IDEAS

    as
    1. Christian Broda & David E. Weinstein, 2006. "Globalization and the Gains From Variety," The Quarterly Journal of Economics, Oxford University Press, vol. 121(2), pages 541-585.
    2. Krugman, Paul & Elizondo, Raul Livas, 1996. "Trade policy and the Third World metropolis," Journal of Development Economics, Elsevier, vol. 49(1), pages 137-150, April.
    3. Feenstra, Robert C, 1994. "New Product Varieties and the Measurement of International Prices," American Economic Review, American Economic Association, vol. 84(1), pages 157-177, March.
    4. Robert Feenstra & Hiau Looi Kee, 2004. "On the Measurement of Product Variety in Trade," American Economic Review, American Economic Association, vol. 94(2), pages 145-149, May.
    5. McCallum, John, 1995. "National Borders Matter: Canada-U.S. Regional Trade Patterns," American Economic Review, American Economic Association, vol. 85(3), pages 615-623, June.
    6. David Hummels & Peter J. Klenow, 2005. "The Variety and Quality of a Nation's Exports," American Economic Review, American Economic Association, vol. 95(3), pages 704-723, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    Agglomeration; Export Variety; Extensive Margin; Japan; Regional Export;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies

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